By Humphrey Carter

PALMA
BALEARIC hoteliers and the local government are backing the decision by the Spanish Confederation of Hotels and Tourism (CEHAT) to take tour operator Thomas Cook UK to the European Commission's Competition Tribunal over the travel group's decision to impose a 5 percent reduction of summer payments on hotels worldwide for all unpaid invoices for August and September.

CEHAT, in a stern warning to Thomas Cook last week, said in a statement: “From the outset we have expressed strong opposition to this requirement, since it unilaterally breaks contract terms and represents a dangerous precedent for the Spanish hotel industry. We will provide legal advice for all the affected hoteliers with the aim of recovering the owed and unpaid amounts.” CEHAT said it had filed a complaint “for illegal practices carried out by the operator” with the Spanish and European competition authorities and yesterday confirmed that is has officially reported Thomas Cook to the European Commission tribunal.

Thomas Cook UK said it had been forced to implement the discounts to cope with losses suffered due to the volcanic ash cloud in spring 2010, which has cost the company an estimated £82 million. Thomas Cook Germany has ruled out taking any such action.

CEHAT made its final decision at yesterday's general assembly and the President of the Minorca Hotel Association, Joan Melis, said after the meeting that the hotel industry as a whole supports the move in order to prevent large tour operators making similar unilateral moves in the future.

Even certain sectors of the British travel industry have expressed their concern over Thomas Cook's decision fearing it could set a bad example to industry as a whole and cause serious damage to hoteliers' revenue and working relations.

Thomas Cook has also angered the Balearics government.
Last week, the local Minister for Tourism, Joana Barcelo, not only gave CEHAT her full backing, she also said that her department will be reviewing its financial commitment to Thomas Cook's promotional campaigns etc.

Melis said that CEHAT has hired the services of one of Spain's top law firms to represent them in Brussels.
But, Thomas Cook UK's five percent discount does not only effect hotels in Spain, it is apparently being applied to all of its hotels worldwide and Melis said that at yesterday's general assembly, there was talk of forming a “global” complaint against the tour operator.

For example, the Caribbean Hotel and Tourism Association promised a “strong collective stand” against the action, while the Cancun Hotel Association sent a letter to Cook chief executive Manny Fontenla-Novoa telling him to drop the “unauthorised deductions” or face legal action.

Melis said that he will be meeting representatives from Thomas Cook at the forthcoming World Travel Market in London in order to find a solution.

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